Las Vegas Sands has reportedly won its long-standing fight with a former casino partner in Macau. It won’t have to be the billions of dollars Asian American Corp. has sought through legal channels for years.
The owner of Asian American Corp., Taiwanese businessman Marshall Hao, had no luck suing Las Vegas Sands (LVS) for breach of contract in Nevada years ago, so he went a different route. He took his fight to Macau, where, according to him, the casino operator forced him to miss out on billions of dollars in revenue.
Hao argued that he put LVS on the Macau map before the operator backed out of its partnership and sided with Galaxy Entertainment (at the time, Galaxy Casino SA) for its casino license. As a result, he wanted $7.5 billion in damages. He’s not going to see any of it, though. GGRAsia reports that, although the ruling has not been made public, the Court of First Instance has rejected the lawsuit.
Hao Not to Win an Argument
Initially, when Hao made his first claim against LVS in 2012, he wanted $375 million. Later, because the operator continued to enjoy success over the years, the figure magically increased to $12 billion. This, he asserted, was the amount he missed out on after LVS gained a larger piece of the Asian gaming market.
Hao argued that, if he had never entered into a partnership with LVS and what eventually became Sands China, he would have pursued a larger piece of Macau’s gaming action on his own. Therefore, because LVS backed out, he missed the opportunity to have the same revenue streams as his former partner ultimately attracted.
LVS had repeatedly argued that Hao backed out of the original deal, not the other way around. In addition, Hao didn’t have the experience that Galaxy had in Macau, and its decision didn’t violate any agreement between LVS and Asian American.
Hao later reduced the amount to $7.5 billion. However, he couldn’t substantiate the basis for the amount as the dispute got underway in Macau. Now, instead of seeing any compensation, he will only book losses. Keeping legal teams busy in the US and Macau is an expensive endeavor.
In light of his track record, Hao may try a different approach. He has been resilient in his attacks, despite the fact that they always have the same outcome.
Sands Ready for a Rebound
With the multibillion-dollar legal drama coming to a close, LVS can focus on more important activities. The president of Sands China, Dr. Wilfred Wong, is optimistic that the company’s operations are going to start to see stability this month. This means the company’s Asian aspirations might gain strength.
Macau just changed the criteria for negative COVID-19 tests upon arrival to the city from the Guangdong Province, one of the major feeder markets out of China. Where the period for the validity of the test was once 24 hours, then 48, it is now 72 hours.
This should help to begin to reinvigorate inbound travel into Macau. The change in policy aligns with the local Labor Day celebration period, which began on May 1 and runs through May 4. LVS is coming off a weak first quarter as a result, in part, of continued travel restrictions in the city.
On May 1, the first day of the holiday, visitation rose significantly. There were 41,584 visitors, according to the Macao Government Tourism Office, 144.7% more than the daily average in March.
LVS could see improvement across most of its Asian operations. In addition to Macau’s current situation, Singapore, where the company operates Marina Bay Sands (MBS), just removed all COVID-19 restrictions last week. This was enough for LVS Chairman and CEO Rob Goldstein to assert, “We’re back in business in Singapore in a very positive way.”
MBS can begin to recover, but there won’t be a quick fix. It could still take a couple of years before the integrated resort normalizes its operations.
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